Congressmen Blast Broadcast Data Deals

Washington-TV stations with plans to offer data services could encounter trouble on Capitol Hill if those new services hinder the rollout of high-definition television.

Both House Commerce Committee chairman Thomas Bliley (R-Va.) and House Tele-communications Subcommittee chairman Billy Tauzin (R-La.) last week issued strong warnings that broadcasters could expect a backlash if HDTV takes a backseat to data.

In a prepared statement, Bliley said TV-station owners should pay billions of dollars if they decide to lease their digital spectrum to wireless-data providers.

He added that TV stations received free spectrum to provide HDTV, but the spate of data deals they have reached indicated that the industry is pulling back from that technology. "If you want to offer other services with the HDTV spectrum, you should pay for it, like you would in an auction," Bliley said.

At a House Telecommunications Subcommittee hearing on broadcasters' transition to digital, Tauzin put it more bluntly: If data services mean no HDTV, Congress should take back some of the digital spectrum it gave all commercial TV stations in 1996.

"What is definitely a deal breaker would be for the broadcasters to lease off or sell off that spectrum and profit from the sale or leasing it," Tauzin said. "Any broadcasters that did that, I think, would run the risk of Congress re-visiting the deal and reclaiming the spectrum."

Dozens of TV stations around the country have cut data-spectrum deals. Data services could be sent to various fixed and mobile host devices, including computers, through the use of a portion of a 6-megahertz channel assigned for digital TV, including HDTV.

The leading data service is led by iBlast Networks, which has deals with 225 stations in 143 markets. The iBlast service, which transmits data to PC tuner cards, is expected to begin later this year in 20 markets and to use more than one-third of the digital-TV bandwidth.

What has Tauzin and Bliley most riled up is a plan by the Broadcaster's Digital Cooperative-which consists of 12 station groups led by Granite Broadcasting Corp.-to hire a Wall Street investment banker to lease digital spectrum to companies that want to provide next-generation wireless services.

Under the Telecommunications Act of 1996, Congress said broadcasters could use the digital spectrum for "ancillary and supplementary" services, including subscription-based services. But because they received the spectrum free-of-charge, broadcasters have to share their subscription revenue with the government.

The Federal Communications Commission set the fee at 5 percent of gross revenue derived from those services.

Bliley said broadcasters should pay even more if they decide to sell of some their digital spectrum. He added that the FCC should use as a price proxy the money the British government collected from the recent auction of third-generation wireless licenses. The amount was $35 billion.

"If the FCC sets the value too low, then the FCC should expect to see a request to appear before this committee for a discussion," Bliley said.

FCC chairman William Kennard issued his own warning last week that data should not supplant HDTV.

In a letter to Edward Fritts, president of the National Association of Broadcasters, Kennard cited a provision of the 1996 law that permits the FCC to restrict data services to avoid derogation of digital TV, including HDTV.

"It is the mandate of Congress and the desire of the American people that the principal service of broadcast television remain the provision of video programming. Broadcasters need to plan for the digital-television transition in accordance with this purpose," Kennard said.

One broadcast-industry source said he was not troubled by the remarks from Bliley and Tauzin, noting that Bliley failed to attend the hearing and has decided to retire rather than seek re-election.

Some believe a TV station needs the entire 6 MHz to provide bandwidth-intensive HDTV pictures, while others asserted that the demand on bandwidth by HDTV varies with the sophistication of the picture being displayed. Fast-moving, detail-rich sports programming, for example, requires the entire 6 MHz.